Opinion
No. CV 04-0184947 S
July 17, 2007
MEMORANDUM OF DECISION
The plaintiffs, Tech Air of Naugatuck, LLC (Tech Air) and Dempsey Naugatuck Realty, LLC (Dempsey Realty), brings this action against the defendant, CTR of Charlotte, Inc. (CTR), alleging breach of contract and negligence. The plaintiffs claim that their damages include loss of a major business opportunity for Tech Air.
The original complaint was filed on May 21, 2004. An amended complaint was filed on July 26, 2004. On April 14, 2005, the plaintiffs filed another request to revise accompanied by the proposed second amended complaint. On April 26, 2005, the defendant filed an objection to the plaintiffs' request to leave to amend dated April 14, 2005. The plaintiffs replied to this objection on May 9, 2005, and the defendant filed a sur-reply on May 11, 2005. No order was ever entered with regard to the April 14, 2005 complaint. Because the April 14, 2005 complaint was objected to and never ruled on by the court, the July 26, 2004 complaint is the operative complaint. Additionally, this motion in limine is directed at the July 26, 2004 complaint.
The defendant moves to preclude evidence and testimony relating to the plaintiffs' claims of lost business opportunity found in counts one and two of the plaintiffs' amended complaint.
FACTS
According to the allegations in the complaint, Tech Air entered into a contract with the defendant whereby the defendant would design and construct an automated, computer-controlled system for filling high pressure gas cylinders. The defendant completed and installed the system for Tech Air, and cylinder filling operations began on May 1, 2003. On May 20, 2003, an explosion occurred in the filling system causing property damage to the system and the surrounding building. As a result of the explosion, the gas filling operations were shut down for weeks, and the plaintiff incurred damages including lost profits and loss of business opportunity in that it was not able to purchase another cylinder filling business that it had aspired to purchase, specifically BOC Gases Connecticut operations (BOC). The plaintiffs allege that the defendant breached the contract because it failed to perform the contract in a competent and workmanlike manner. Additionally, the plaintiffs allege that the defendant was negligent in designing and building the gas cylinder filling system.
The defendants move to preclude evidence of loss of business opportunity on the following grounds: the claims are based on speculation and cannot be viewed as a result of any alleged breach of contract, having not been contemplated by the parties; and the plaintiff's standing to bring such a claim.
This motion was originally filed as a motion for summary judgment on February 26, 2007. The motion for summary judgment was denied by the court, Gallagher, J., on April 2, 2007 after the parties agreed that summary judgment was not the appropriate vehicle to address the relief requested by the defendant.
DISCUSSION
Practice Book § 15-3 provides: "The judicial authority to whom a case has been assigned for trial may in its discretion entertain a motion in limine made by any party regarding the admission or exclusion of anticipated evidence. If a case has not yet been assigned for trial, a judicial authority may, for good cause shown, entertain the motion. Such motion shall be in writing and shall describe the anticipated evidence and the prejudice which may result therefrom. All interested parties shall be afforded an opportunity to be heard regarding the motion and the relief requested. The judicial authority may grant the relief sought in the motion or such other relief as it may deem appropriate, may deny the motion with or without prejudice to its later renewal, or may reserve decision thereon until a later time in the proceeding."
"The purpose of a motion in limine is to exclude irrelevant, inadmissible and prejudicial evidence from trial . . . A trial court should exclude evidence if it would create undue prejudice and threaten an injustice if admitted." (Citations omitted; internal quotation marks omitted.) State v. Lo Sacco, 26 Conn.App. 439, 444, 602 A.2d 589 (1992). "The decision whether, in the first instance, the court should entertain a motion in limine is a discretionary one. As a general proposition, the purpose of the motion is to insulate the jury from exposure to harmful inadmissible evidence. McCormick, Evidence, 3d Ed., p. 128. A ruling excluding (or admitting) evidence claimed to be cumulative is also a discretionary one. Hydro-Centrifugals, Inc. v. Crawford Laundry Co., 110 Conn. 49, 54-55 (1929); Fitzpatrick v. Cinitis, 107 Conn. 91, 98-99 (1927); State v. Lemoine, 6 Conn.App. 334, 338 (1986)." (Internal quotation marks omitted.) Walter v. Peck, Superior Court, judicial district of Waterbury, Docket No. 082889 (July 9, 1991, Gaffney, J.) (6 C.S.C.R. 722).
The defendant argues that because the plaintiffs were only in negotiations to purchase another business and it was uncertain that a deal actually would have gone through, any evidence as to causation or damages would be mere speculation. The defendant further argues that the plaintiffs do not have standing to bring a claim for lost business opportunity because it was not clear which entity (Dempsey Realty, Tech Air, Mr. Dempsey personally or another entity) would be purchasing BOC at the time of negotiations.
The plaintiffs argue that the motion in limine is not justified because the evidence has not been shown to have a prejudicial effect. The plaintiffs further argue that the issues of causation and damages are issues of fact to be determined by the jury and that based on the evidence that will be presented at trial that a jury could logically infer that, but for the explosion, the BOC closing would have concluded sometime before July 1, 2004. The plaintiff asserts that Tech Air does have standing to make claims as to the lost business opportunity because they were a party to the original contract with CTR. The plaintiffs also plan to present expert testimony as to the damages suffered by the plaintiffs as a result of the deal falling through.
The court addresses the "standing" issue first. "Standing is not a technical rule intended to keep aggrieved parties out of court; nor is it a test of substantive rights. Rather it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented . . . These two objectives are ordinarily held to have been met when a complainant makes a colorable claim of direct injury [that] he has suffered or is likely to suffer, in an individual or representative capacity." (Internal quotation marks omitted.) Carrubba v. Moskowitz, 274 Conn. 533, 550-51, 887 A.2d 773 (2005). On the other hand, "[when] a plaintiff complains of injuries that are wholly derivative of harm to a third party, [the] plaintiff's injuries are generally deemed indirect and as a consequence too remote, as a matter of law, to support recovery." (Internal quotation marks omitted.) Connecticut State Medical Society v. Oxford Health Plans (CT), Inc., 272 Conn. 469, 478, 863 A.2d 645 (2005).
"[T]he [United States] Supreme Court noted the impossibility of articulating a black-letter rule capable of dictating a result in every case . . . Accordingly, it identified three policy factors to guide courts in their application of the general principle that plaintiffs with indirect injuries lack standing to sue . . . First, the more indirect an injury is, the more difficult it becomes to determine the amount of [the] plaintiff's damages attributable to the wrongdoing as opposed to other, independent factors. Second, recognizing claims by the indirectly injured would require courts to adopt complicated rules apportioning damages among plaintiffs removed at different levels of injury from the violative acts, in order to avoid the risk of multiple recoveries. Third, struggling with the first two problems is unnecessary [when] there are directly injured parties who can remedy the harm without these attendant problems." (Citations omitted; internal quotation marks omitted.) Id., 478-79, citing Ganim v. Smith Wesson Corp., supra, 258 Conn. 351-53.
Tech Air
This court finds that, as a party to the contract, Tech Air has standing to sue in this case. Tech Air purchased the product that subsequently exploded, and Tech Air was directly injured by this explosion. Tech Air, therefore, has the right to present evidence as to any damages flowing from the breach of contract such as loss of business opportunity. There has been no showing by the defendant that this evidence would be prejudicial to the jury. If, at the close of Tech Air's case, the defendant believes that no reasonable jury could find in favor of the plaintiff, then the defendant may request the court to enter a directed verdict at that time. This court does not believe, however, that it would be proper to exclude all evidence regarding the lost business opportunity at this point in the case. The motion in limine is, therefore, denied as to Tech Air on this ground.
Dempsey Realty
There are no allegations in the July 24, 2006 complaint that Dempsey Realty suffered any damages. Count one specifically alleges that "[a]s a result of the Defendant CTS's breach of its contractual obligations, the Plaintiff Tech Air has suffered money damages." Count two also alleges that "[a]s a result of the Defendant CTR's negligence, the Plaintiff Tech Air has suffered money damages." There are no allegations that Dempsey Realty has suffered any damages. Because Dempsey has failed to allege a direct injury, or any injury at all for that matter, they do not have standing in this case.
Furthermore, any evidence regarding Dempsey Realty's lost business opportunity would also be irrelevant because they have not alleged any damages as a result of the defendant's breach or negligence. Therefore, the defendant's motion is granted with regard to Dempsey Realty, and all evidence regarding Dempsey Realty's lost business opportunity is precluded.
Damages
With regard to damages, "`[t]he general rule in breach of contract cases is that the award of damages is designed to place the injured party, so far as can be done by money, in the same position as that which he would have been in had the contract been performed.' (Internal quotation marks omitted.) West Haven Sound Development Corp. v. West Haven, 201 Conn. 305, 319, 514 A.2d 734 (1986). The Restatement (Second) of Contracts divides a defendant's recovery into two components: (1) direct damages, composed of `the loss in value to him of the other party's performance caused by its failure or deficiency'; 3 Restatement (Second), Contracts § 347(a) (1981); plus, (2) `any other loss, including incidental or consequential loss, caused by the breach . . .' Id., § 347(b). Traditionally, consequential damages include `any loss that may fairly and reasonably be considered [as] arising naturally, i.e., according to the usual course of things, from such breach of contract itself.' West Haven Sound Development Corp. v. West Haven, supra, 201 Conn. 319, quoting Hadley v. Baxendale, 9 Ex. 341, 354, 156 Eng. Rep. 145 (1854). Although there is no unyielding formula by which damages are calculated, `it is our rule that [u]nless they are too speculative and remote, prospective profits are allowable as an element of damage whenever their loss arises directly from and as a natural consequence of the breach.' West Haven Sound Development Corp. v. West Haven, supra, 320, quoting Kay Petroleum Corp. v. Piergrossi, 137 Conn. 620, 624, 79 A.2d 829 (1951)." Ambrogio v. Beaver Road Associates, 267 Conn. 148, 155, 836 A.2d 1183 (2003).
"Our courts have consistently applied the general damage formula of Hadley v. Baxendale, [9 Ex. 241, 354, 156 Eng. Rep. 145 (1854),] to the recovery of lost profits for breach of contract . . ." Locascio v. Mueller, Superior Court, judicial district of Litchfield, Docket No. CV 03 0089395S (Mar. 30, 2004, Brunetti, J.) "Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonable be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants, and thus known to both parties, the damages resulting from the breach of such a contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated. But, on the other hand, if these special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases not affected by any special circumstances from such breach of contract. For, had the special circumstances been known, the parties might have specially provided for the breach of contract by special terms as to the damages in that case; and this advantage would be very unjust to deprive them." Hadley v. Baxendale, 9 Ex. 341, 355-56 (1854).
This court finds that Tech Air is entitled to present evidence as to whether the potential purchase of BOC was known to both parties and whether the lost business opportunity was a probable result of the breach of contract between Tech Air and CTS. Again, if the plaintiffs are unable to show that this was contemplated at the time of the contract, the defendant may request a directed verdict as to the damages flowing from the lost business opportunity. This court will not, however, exclude the evidence at this time.
CONCLUSION
Based on the foregoing, the motion in limine to preclude the plaintiffs from presenting evidence as to the lost business opportunity is denied as to Tech Air and granted as to Dempsey Realty.